Lower-of-Cost-or-Market Inventory Required: Determine the inventory at cost and
ID: 2498799 • Letter: L
Question
Lower-of-Cost-or-Market Inventory
Required:
Determine the inventory at cost and also at the lower of cost or market, using the first-in, first-out method. Record the appropriate unit costs on the inventory sheet, and complete the pricing of the inventory. When there are two different unit costs applicable to an item:
Insert the quantity and unit cost of the last purchase.
On the following line, insert the quantity and unit cost of the next-to-the-last purchase.
Total the cost and market columns and insert the lower of the two totals in the Lower of C or M column.
The first item on the inventory sheet has been completed as an example.
Lower-of-Cost-or-Market Inventory
Data on the physical inventory of Katus Products Co. as of December 31, 2014, are presented below.
Quantity and cost data from the last purchases invoice of the year and the next-to-the-last purchases invoice are summarized as follows:
Required:
Determine the inventory at cost and also at the lower of cost or market, using the first-in, first-out method. Record the appropriate unit costs on the inventory sheet, and complete the pricing of the inventory. When there are two different unit costs applicable to an item:
Insert the quantity and unit cost of the last purchase.
On the following line, insert the quantity and unit cost of the next-to-the-last purchase.
Total the cost and market columns and insert the lower of the two totals in the Lower of C or M column.
The first item on the inventory sheet has been completed as an example.
Katus ProductsInventory Sheet
December 31, 2014 Commodity Inventory Quantity Unit Cost Price Unit Market Price Total Cost Total Market Total Lower of C or M A54 37 30 $60 $56 $1,800 $1,680 7 58 56 406 392 2,206 2,072 $2,072 C77 24 178 F66 30 132 132 H83 21 545 545 K12 375 5 Q58 90 18 18 S36 8 235 235 V97 140 20 20 Y88 17 744 744 Total $ $ $
Explanation / Answer
Commodity Inventory Qty Unit cost price Unit market price Total cost total market total of c or M A54 37 30 60 56 1800 1680 7 58 56 406 392 2206 2072 $2072 C77 24 24 174 178 4176 4272 4176 F66 30 20 130 132 2600 2640 10 128 132 1280 1320 3880 3960 3880 H83 21 6 547 545 3282 3270 15 540 545 8100 8175 11,382 11,445 11382 K12 375 375 6 5 2250 1875 1875 Q58 90 75 25 18 1875 1350 15 26 18 390 370 2265 1620 1620 s36 8 5 256 235 1280 1175 3 260 235 780 705 2060 1880 1880 V97 140 100 17 20 1700 2000 40 16 20 640 800 2340 2800 2340 Y88 17 10 750 744 7500 7440 7 740 744 5180 5208 12680 12648 12648 total $41,873
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